The display came as President Petro Poroshenko vowed to raise defence spending to defeat the rebels during an ostentatious procession of tanks and weaponry through downtown Kiev, meant to mark Ukraine's 23rd anniversary of independence from the Soviet Union.

The developments underscore the increasing divisions in Ukraine as it gears up for what could be many more months of conflict. While support and mobilisation for Kiev's campaign against the separatists has only grown in many parts of the country, resentments fester in much of the east, where civilian casualties and shelling have become a part of daily life.

Several thousand onlookers had gathered in the main square of Donetsk and shouted obscenities at the dozens of captives, some in Ukrainian military garb and some in tattered civilian clothing, that were forced to march past them. They were flanked by armed rebels bearing bayoneted rifles.

One visibly agitated man yelled atrocities as he held an infant in one arm. A woman shouted "Hang the fascists from a tree!" Other women rushed at the prisoners, trying to kick and slap them, and were restrained by rebel fighters.

Two water trucks followed the prisoners and hosed down the road, an image meant to evoke historical parallels with an event in Moscow in 1944, when Red Army soldiers paraded tens of thousands of German prisoners of war through the streets.

"Kiev said that on the 24th, on the Independence Day of Ukraine, they would have a parade. Indeed, they did march in Donetsk, although it wasn't a parade," top rebel commander Alexander Zakharchenko said. "Soldiers of the armed forces of Kiev walked along the main streets of Donetsk. What Poroshenko planned has taken place."

The rebels also placed several fire-blackened, shrapnel-shredded Ukrainian military vehicles in Donetsk's main square. Russian nationalist songs blasted from speakers as supporters posed for photos in front of a destroyed tank. The crowd appeared on edge, as dozens of fighters gathered in formation but quickly dispersed when artillery fire sounded in the distance.

"Today is the so-called independence day of what was Ukraine. And look what has happened to their equipment. This is what has become of Ukraine!" said a pro-Russian rebel fighter who identified herself by her battle name, Nursa, pointing at the remains of a Ukrainian troop transport.

One onlooker grabbed a Ukrainian flag from the wreckage of one tank and threw it to the ground. Several others trampled on it, wiping their feet and spitting.

Alexander, a 40-year-old businessman from Donetsk who declined to give his surname, said the Ukrainian flag had no place in the city.

"I feel this is no place for this flag. The great achievement here is that people can see it in the state that it deserves to be in," he said.

Growing resentment

Resentment has grown in the east as residential areas have increasingly come under fire in recent weeks, with the civilian death toll rising to at least 2 000 since April, according to a United Nations report. In Donetsk, an estimated 300 000 of the city's population of 1 million have fled the fighting, and many of those who remain have gone weeks without electricity or running water and spent days staked out in bomb shelters.

Early on Sunday, artillery shells struck several residential buildings as well as a major hospital and morgue in downtown Donetsk, although nobody was reported killed. The government has denied that Ukraine's forces were responsible for the shelling of any residential buildings or hospitals.

The situation is even direr in Luhansk, a city closer to the Russian border whose war-reduced population of a quarter-million people has suffered under constant fighting in recent weeks. Andriy Lysenko, spokesperson for the Ukrainian National Security Council, told journalists Sunday said 68 civilians had been wounded there in the past 24 hours, but could not confirm whether anyone had been killed.

The scene in Donetsk proved a striking contrast to the fanfare in Kiev, where more than 20 000 people, many waving the country's blue and yellow flags or donning traditional embroidered shirts, watched the parade on Kiev's Independence Square, where months of protests earlier this year ended in the ouster of the country's former pro-Russian president.

Poroshenko announced he would raise military spending by 40 billion hryvnia ($3bn) through 2017, an effective 50% increase from current budget targets.

"It is clear that in the foreseeable future there will always, unfortunately, be the threat of war," he said in an address to the highly militarised independence rally. "And we not only have to learn to live with that. We must always be prepared to defend our independence."

Increased military spending

Ukrainian military leaders have pleaded for extra resources as they face a potentially protracted fight against separatists. In recent weeks, Kiev's troops have scored heavy gains in territory and encircled the east's regional capitals of Luhansk and Donetsk.

Lysenko said Sunday that 722 members of Ukraine's armed forces have died in the fighting, with five killed and eight wounded in the past day alone.

In another symbolic move, Poroshenko traveled south to the predominantly Russian-speaking port city of Odessa to give a second speech on Sunday. Ukrainian television showed footage of navy ships bobbing by the shore on a stormy, turbulent sea.

Ukraine lost much of its coastline when the Black Sea peninsula of Crimea was annexed by Russia in March, and the loyalty of local authorities in Odessa to Kiev has been a top priority for the new government.

Poroshenko and his Russian counterpart Vladimir Putin are set to meet on Tuesday in Minsk, Belarus, alongside other European Union leaders. The two leaders have not met since early June, and many hope that the talks could help defuse the conflict in east Ukraine.

But German Chancellor Angela Merkel on Sunday cautioned against expectations of a decisive breakthrough at the much-anticipated meeting.

"The meeting in Minsk certainly won't yet bring the breakthrough," she said. "But you have to speak to one another if you want to find solutions."